Sangeeth Peruri to Profit from NEC Enrollment Growth?

LASD Board Trustee Sangeeth Peruri is entrepreneurial. Paraphraing him, “When I see an unmeet need or problem, I try to find a solution to meet it.” He has business interests/projects in

NEC real estate — 544 San Antonio Road

election software — Voters Circle, and perhaps soon in

an “innovative” SAM mortgage venture targeting teachers.

Is all this just socially conscious investing? Is he prospering with purpose?

This is owned by 544 San Antonio LLC. Principal is Sangeeth Peruri. Photo from Google Early datedJuly 2016.

544 San Antonio Road – in the MV precise plan

On March 14, 2016, Sangeeth Peruri LLC, became the owner of small commericial/office building on the corner of San Antonio and Fayette in Mountain View.

Yes, the LLC contact is the Sangeeth Peruri who is a LASD Trustee.

Sangeeth Peruri LLC purchased property inside the NEC area of the Los Altos School District

The record shows that since about 2012, this property had been refinanced several times by the previous owner(s), perhaps in order to obtain a lower interest rate, or perhaps for pulling out equity. [That owner is not known at this time.] The property has stood empty with no tenant for a quite awhile.

Figure: 544 San Antonio on Density Bonus Map, close to transit

The 544 San Antonio Parcel is in the area of the San Antonio Precise Plan. It is a high density area, and with State density bonuses for BMRs, can be even denser and taller

We all know that since Peruri was elected in 2014, the school board has been continuously working with real estate agents searching for land for a new school site, especially in the North of El Camino (NEC) area. It seemed like at least once a month, the Board was discussing a long list of properties in closed session.

Perhaps through this LASD quest for real estate, Peruri learned a lot of interesting details about NEC real estate market dynamics. This is knowledge that one could apply to personal investments. In any case, this 544 San Antonio property obviously came to Peruri’s attention.

At under 1 acre, this property at 544 San Antonio was not meeting size criteria for the kind of school the District said it was planning. [What the District was seeking was a parcel large enough for either a 400-500 student NEC k-5/6 neighborhood school or large enough for a 900 student k-8 Bullis Charter School.] The District did not buy this property, but Peruri did for his personal wealth portfolio. Perhaps he was diversifying from mainly financial assets — which as a prior Hi-Tech securities analyst is a market he knows very well — into more real estate market assets, where he had heretofore been less experienced.

Figure: Prometheus project about to go up nextdoor to 544 San Antonio

Rendering of the apartment project breaking ground next to the 544 San Antonio LLC parcel. We see than even more high density and tall density is coming to the land across from the new Safeway on San Antonio Road, Mountain View.

How can Peruri’s 544 parcel be developed?

Because it is in the San Antonio Precise Plan Area, Peruri’s property could enjoy all the same developer incentives as the 562 housing unit Promethus project next door on ~5.5 acres. Because of 48 Very Low Income BMRs, the Prometheus project has a 35% density bonus, above and beyond the San Antonio Area precise plan normal density. It has some 4-story buildings and some- wait for it — 7-story buildings. What a view!

The informal application for this Prometheus project at this ~600 unit size was first begun Oct. 2015. [It had previously been on the MV Planning “current projects list” since at least June 2015 as a 300 to 400 unit project.] The MV City Council gave final approval to the big Prometheus Project Plan Sept. 27, 2016. In that evening’s council packet, one can find a letter from LASD Superintendent Baier decrying the city’s allowing so many new housing units in LASD.

Yet now we have a LASD Trustee who may get himself involved in contributing to the NEC enrollment growth? Tell me it isn’t true? – Lalahpolitico

Figure: In this photo and the lead photo, architects expect some kids

This Prometheus project nextdoor to 544 San Antonio is planned as all apartments. But the architects are expecting at least some kids. See stroller…And there is nice little park going in…

Possible Restrictions on Sangeeth Peruri Parcel

By riffling though MV planning documents and by making a couple of phone calls to their planning, I learned there is big Hetch Hetchy easement through several properties in the area. A project going in on Fayette, sort of across from 544, is leaving about one- quarter of the land as grass…that’s the water easement affecting their parcel(s). I believe the “Water Company” has the right to access and dig up its pipes which run through the easement.

Figure: Prometheus project avoids Water Easement

Water Easement indicated in yellow. 544 San Antonio indicated by red line. In light green, City gets some of Prometheus land for a park.

Prometheus avoided parcels with the water easement when it assembled 7 or so parcels for these 562 apartments in the drawing above. The water easement — shown in yellow — does seem to limit the buildable land area at 544 San Antonio shown in red line. Notice how the existing building avoids the easement. [There is a small, single family home above the 544 parcel.]

Lalah Speculation: In spite of the water easement, one can perhaps still cram a lot of mixed use and dwelling units on the 544 San Antonio parcel, given the basic density allowable and the available density bonuses on top of that. Is the July 2016 for lease sign still up as of today? Yup. It is offered at $4.95 a square foot as a office. Maybe he is land-banking it and will eventually sell it to LASD as a small k-2 school for NEC? Would it be more valuable and socially useful if redeveloped now as condos stacked on top of mixed use? Arguably. Maybe Peruri’s newest prospective venture will play a role? Read on.

Apartments for rent or CONDOS for purchase could be built on 544 San Antonio. Napkin Math — If Prometheus is getting about 100 units an acre, perhaps 50 could be built on 544 San Antonio. The complex could be managed as housing exclusively for LASD teachers only, much like Stanford manages the Los Altos apartments at the Colonnade for housing Stanford employees.

However LASD is not Stanford. It is much more likely, that in the future District will help teachers find housing, not provide it. Next spring the District will partner with LACF to match young teachers with residents who are willing to rent a spare bedroom or an unused granny unit to a teacher. Typically these quarters are all modest and more affordable the market rents. This fall Peruri conducted an online survey of which found that about half of LASD teachers commute about an hour each day.

Peruri’s newest idea is to create a venture – a “Community Investment Fund” — which would help more mid-level teachers by “helping” them come up with the 20% down usually required to buy a home. He uses the example of a $1M condo in a nearby area, a purchase that would require a $200,000 down payment. Suppose the teacher has family and friends that can provide $100,000. A Community Investment Fund – comprised of “socially conscious” private investors – could provide the next $100,000 or 10% of the purchase price .

Figure: Excerpt from the web – Search “Shared Appreciation Loans”

Some definitions from a web site. What is the “recaptured equity” used for? To pay investors or to increase the subsidy to assist the next purchaser? Or Both?

The outline of loan terms that Sangeeth Peruri floated as a trial ballon at a meeting of the Los Altos Community Coalition were these. There would be no repayment at all until the property was sold [or rented?]. The buyer just had to be able to make payments monthly for their 1st mortgage. When sold, the Community Investment Fund would receive 25% of the price appreciation gain [and repayment of the principal]. For a 10% stake, the interest would be 25% of the appreciation.

Photo: At right, Sangeeth Peruri outlining his concept for a Teacher Loan Program

To Lalahpolitico, that sounded a bit much. My short investigation into these SAMs ( Shared Appreciation Mortgages) found several concerning things.

Some Napkin Finance – an example $1,000,000 condo

Assume Sangeeth Peruri ‘s terms: 10 % principal borrowed with all capital and interest payments deferred till sale, in exchange for a “price” of 25% of the property price appreciation gain at time of sale. Assume a purchase price of $1,000,000. Assume an annual housing price appreciation of 8% a year compounding monthly. [This results in a ~10X of housing prices over 30 years; this is much like the past 30 years in our area. ]

Looking at 5 year, 10 year and 20 year sale of the property, what would be the annualized (simple) APR on borrowing $100,000 as a 2nd SAM mortagage to finance half of the 20% down payment? Because the borrower is making no payments on the 2nd mortgage till the end, the ballon is getting bigger and bigger.

A very expensive loan for the teacher. All the examples of cities (eg. San Diego) offering these to city employees did so on terms like 15% subsidy for 15% of appreciation or a 10% subsidy for 10% of appreciation. Peruri’s example of 10% stake for 25% of appreciation seemingly results in credit card and pay day lender levels of interest payments…APR 20% to APR 40%. Wow that’s an expensive loan. The longer one stays in the loan, the worse the APR%, the bigger the ballon payment at the end. When the teacher finally sells, she better plan to move back to Tracy… what with the equity that’s left her from her condo sale, is that the only real estate she will be able to afford in California?

Unknown return to Private Investor vs. Future Teacher Affordability. Sangeeth Peruri did not discuss what kind of return the investors in the Community Fund would be enjoying. How much of the appreciated equity would be going back into the fund to assist the next teacher purchaser with affordability? This is crucial missing information for judging if social justice is being improved or not.

Photo: Stanford Un. employee housing in Los Altos

Wealthy Stanford University has housing programs for faculty/ employees including this Los Altos Colonnade apt. complex. It also has “Shared Appreciation Loans,” at least in has in the recent past.

Reputation of SAMs.? At the recent LACC meeting, Sangeeth Peruri touted that Stanford University had a program of SAMs helping faculty make housing purchases. I think HAD, as in “used to have” may be the key word now. When I went to the Stanford Housing website, a notice appeared that Well Fargo was no longer providing 1st mortgages for the “Shared Appreciation” program. I could find NO pages pertaining to the subject. Is the program suspended? Is the program manager who was in charge at Stanford now packaging the SAM idea for California school districts? With Sangeeth Peruri?

Usury Laws? Apparently CA has limited usury laws. And if a real estate professional arranges the loan contract, apparently it isn’t usury! However, the Federal Reserve has some kind for form for SAMs that requires pretty simple looking, frank and direct disclosure. Would you want a teacher who signed one these contracts disclosing 20%, 30% 40% interest rates, teaching your kids arithmetic? In Los Altos and Mountain View, pay day lenders are not a permitted use of a building. They are banned. It’s true that in California, a School District is an independent government entity. It is not governed by any municipality or county. So I guess they could conduct lending at pay day rates of interest!!! They are not subject to City permitted use zoning?

Voter Circle – Data Mining for your Preferred Slate

Home page of Voter Circle about a month ago

In the fall of 2014, Trustee Sangeeth Peruri hired a young Los Altan, a recent political science graduate of UC Davis to work on the successful Measure N campaign. The Measure Ncampaign’s form 460 indicates he [KP] was paid $7679 for two or three months works on the campaign. A pitance compared to the $124,931 paid to the bond consultant, TBWB. What is known is that after the 2014 campaign, KP indicated he worked for Voter Circle for about a year. KP has moved on to a good job working for a litigation analytics company. [That means data mining in order to help lawyers select juries, avoid certain judges, etc.]

Sangeeth Peruri says he got the idea for the Voter Circle campaign software service while working on the 2014 Measure N campaign phone banks. He was sitting next to another volunteer and noticed that their respective call lists of personal contacts had a lot of overlap. Lalah doesn’t know if Peruri started creating the Voter Circle right away and if he did, did he get it to a level where he could test the software on his own “Sangeeth Peruri for LASD Board 2014” campaign?

Fast forward to now. Voter Circle in 2016 is software that lets campaigns enlist supporters to easily send email blasts to the supporter’s personal contacts. It has been deployed as part of the Measure GG parcel tax campaign and for Board Candidate Bryan Johnson.

The campaigns are paying a nominal $300 for 3 months of service. A supporter can choose which contacts to include or exclude from upload to the campaign he/she is supporting. The software matches the supporter’s contacts to registered voters in the campaign voter file. Apparently email is not sent to contacts not registered to vote. The supporter can review the content of the email being sent by the campaign and press the SEND button.

Inside the software, only the campaign manager user, not the supporter user, can see which of the supporter’s emails bounced, were delivered, were opened or were clicked. If a recipient — clicks on YES, I support, NO I oppose, or “take me off your list”, that recipient email address should not be getting bothered again by Voter Circle software. The benefit to the campaign is getting those YES or NO clicks – those registered voters do not need to be contacted by the phone bank to find out which way they are voting! Peruri says that the software allows a campaign to reduce the volunteer hours spent on this first round of phone banking. With the YES email responses, the campaign manager can email those voters reminders to vote, etc. When there is an associated phone number, the YES voters can be contacted by automated phone reminders to go vote YES.

Sangeeth Peruri told me that Voter Circle has been considered/used by around 50 local campaigns. I checked a couple of campaigns of the 10 or so Sangeeth mentioned, but they did not confirm use. The campaigns that appear to be using VoterCircle are Measure GG, Jessica Speiser for a short time [she is uncontested], Bryan Johnson for LASD and perhaps Steve Smiley for City Council. Sangeeth Peruri also supports Neysa Fligor for city council. But when I checked, her campaign was not using the software tool, but perhaps was still considering it.

The Measure GG campaign is paying a nominal $300 to Voter Circle for 3 months of service.

Some people fear there is data sharing that violates privacy…no smoking gun

Lalahpolitico: Voter Circle is Sinister or Not?

I don’t think there is anything intentionally sinister here. I personally would not participate as a “supporter” of a campaign using Voter Circle because I won’t upload my contacts to anyone, not FaceBook, not Google, not anyone. OK, maybe Apple has them already. However, if I were a local campaign manager, I would not want to ASK any supporter to use their contacts in this way. But times change and people have different sensitivities about privacy. Just because my sensitivity is on the high side, that doesn’t mean YOU should NOT reveal your email contacts list to Voter Circle.

A hypothetical… a person who supports Bryan Johnson for school board — also might want to support Steve Smiley for City Council. A top goal for Steve is to improve City-School relations [Lalahpolitico: by reversing the 2015 Council decision to NOT use City land for a school.] And anyone voting for those two is for sure going to vote YES on GG. [But GG has many, many other types supporters.]

Yes, it would be convenient if all the candidates and issues that Sangeeth Peruri endorses — aka Peruri’s chosen slate — could share voter data collection at the software level. Surely the Voter Circle System Admin god can SEE all the data if she really wants to, and can copy it. But the campaigns can share this data through human means if they really want to share it.

Lalahpolitico has heard allegations from people who received Voter Circle emails which they feel were impossible to receive without the illicit sharing of data across campaigns. Yeah, that doesn’t mean Voter Circle software automation did the sharing. Sharing is also possible through manual means; export VC data as an excel file and give it to the other guy’s campaign. Yeah, it’s not as easy peasy and automated, but it works. And cooperation is legal. No smoking gun here.

If Peruri wants to operate as a one-man PAC for the candidates and issues he endorses — for his chosen slate — that is his First Amendment right. He’ll be mindful of steering clear of campaign spending limits.

Here’s Peruri’s chosen local ticket – YES on GG, Bryon Johnson for LASD, and for City Council – Steve Smiley and Neysa Fligor. Candidates for office who compete with these might want to steer clear of using Voter Circle for their campaign…out of an excess of caution. [Last I heard, the Fligor campaign has declined to use it. She does compete with Smiley.]

Lalahpolitico Conclusion: Enabling Negative Campaigning?

Is all these ventures — 544 El Camino, teacher housing finance, Voter Circle — is Sangeeth Peruri just doing some socially conscious investing? Is he aiming to prosper with purpose? Sure, but…

… it certainly raises some eyebrows. Some people feel like they are being used as lab rats or software beta testers without permission.

Are LASD trustees meddling in the 2016 election, as alleged by the Daily Post? Some people feel Peruri is using Voter Circle as a tool to enable negative campaigning in the this 2016 school board election. The School Borg’s choice, Bryan Johnson, can’t say anything negative about about his opponent — Tanya Raschke — in our town without being booed and hissed. But apparently Trustee Sangeeth Peruri certainly can. Voter Circle can be a chain letter for automating the passing on of negative comments.

Figure: Tanya Raschke on LASD Facilities Committee…

Tanya Raschke, Candidate for LASD Board 2016, standing and speaking at one of many, many meetings of the LASD Facilities Master Plan Committee. One of the ideas she explored was a neighborhood school for NEC. She knows a great deal more about the $300M worth needed facilities projects at LASD’s 9 schools than her opponent, Bryan Johnson. She is working on a $250M construction project at Stanford Un. She looks much better prepared to allocate, plan and oversee LASD’s $150M of funds across $300M to $450 M of possible projects than Bryan does.

See this Los Altos Politico Post about how the Los Altos School Borg self- replicates election after election and about Tanya Rascke being the candidate with long experience on the LASD’s Facilities Master Plan Committee. She has spent way MORE TIME on LASD board level endeavors than Bryan Johnson. She is the candidate that is prepared to deal with the pressing issue before the board – how to spend $150 M of Measure N money. She’s the candidate who helped prioritize the $300M- $450M of needs and wants at the 9 existing school campuses. She’s the one who has been around LASD enough. Not Bryan Johnson.

The Daily Post on Oct. 19 wrote about the Board meddling. The same day, the DP endorsed Tanya Raschke as the better candidate for school board.

In contrast, if you want to receive or pass on “negative,” tell-it-like-it-is narrative from Los Altos Politico you have to do it the old-fashioned way. To receive it… subscribe online to the weekly email, put it in your RSS feed, or just visit the web site. To pass it on, put the link in an email and send it to as many people who you think need to know. Or forward the Losaltospolitico weekly Mailchimp e-letter to one contact at a time. I’m proud to say Lalahpolitco does not make disseminating negative comments as automated as Voter Circle does.

FYI, you cannot send more 100 or so emails a days from your gmail.com, yahoo.com, aol.com. The company thinks you are behaving like a spammer and will not send beyond its limit. [There is some kind of anti-spam agreement between all the big providers…so the interconnected internet email servers do not get crushed by transferring the spam flooding through.]

Photo: 544 San Antonio Oct.23, 2016

544 San Antonio on Oct. 23, 2016. For lease sign still up. Election signs for Peruri’s slate – Steve Smilely for LA Council, Bryan Johnson for LASD, Yes on GG hidden in bushes. Lalahpolitico will join Peruri in supporting Grace Mah for relection to the Santa Clara County School Board and in supporting Measure GG. [There were no Neysa for LA City Council that signs I could see.]

Footnote: This is not the first time LASD Trustees have dabbled in school related MV real estate. See Mark Goines.

About the author

lalahpolitico

Norma Schroder is an economics & market researcher by trade and ardent independent journalist, photographer and videographer by avocation. Enthralled by the growth of the tech industry over the decades, she became fascinated with the business of local politics only in the past couple of years.